Tokyo/Osaka – East Japan Railway Co., or JR East, and West Japan Railway Co., or JR West, expect to suffer consolidated net losses totaling some ¥650 billion in fiscal 2020, due to a slump in travel demand amid the new coronavirus epidemic.
JR East said Wednesday that it forecasts a net loss of ¥418 billion for the year ending in March 2021, against the previous year’s net profit of ¥198.4 billion. JR West separately said its bottom line is expected to result in a loss of ¥240 billion, compared with a ¥89.4-billion profit in fiscal 2019.
The two companies stopped short of releasing earnings projections for the whole of fiscal 2020, noting that the extent of the impact of the virus crisis is unpredictable.
JR East has never incurred an annual net loss since the company and other Japan Railways Group firms were established in 1987 after the breakup and privatization of Japanese National Railways.
JR West last posted a net loss in fiscal 1989. The virus crisis “is starting to have extremely large impacts on our finances,” JR West senior official Shoji Kurasaka told a news conference.
Both companies expect the number of passengers to remain sluggish for the rest of 2020 and start recovering early next year. Fiscal 2020 railway business revenue is estimated at ¥1.02 trillion for JR East, down 43.1 percent year on year, and at ¥435 billion for JR West, down 49.2 percent.
Believing that the severe business environment will continue for the time being, the two companies plan to speed up cost reductions. JR East aims to save ¥150 billion in labor and other costs. JR West intends to cut annual costs by ¥70 billion, larger than the initially planned ¥50 billion.
JR East and JR West are slated to move up the last trains of the day in timetable revisions next spring, partly in order to secure more time for train and track maintenance work at night.
They will also consider reviewing their fare structures, including the introduction of a system in which fares vary by the time of day, following the spread of teleworking and staggered commuting in response to the coronavirus epidemic.
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